Auction brings $7.6 million for 'Double Eagle'

The $20 gold pieces were ordered destroyed before being put into circulation during the Depression.

From Beth NissenCNN

(CNN) --The 1933 gold Double Eagle coin has seen its share of jeopardy in a history that could have come straight from "The Maltese Falcon."

Since it was minted in 1933, the coin has been stolen, shipped to Egypt, hidden and almost destroyed by fire twice. The Double Eagle -- an ounce of nearly pure gold -- went up for auction Tuesday night at Sothebys, selling for $6.6 million, plus its $20 face value and a 15 percent fee to the auction house -- a total of $7.6 million.

The tale of the Double Eagle coin begins in 1933, in the depths of the Great Depression, during the first year of Franklin D. Roosevelt's presidency.

"People in the U.S. were hoarding gold. It was undermining the nation's financial system," said David Redden, vice chairman and auctioneer at Sotheby's. "And FDR, almost as soon as he became president, within a couple of days, took us, by executive order, off the gold standard."

With payment or hoarding of gold prohibited, thousands of citizens turned in their gold to the banks. But no one told the U.S. Mint to stop making new gold coins: The mint produced 445,000 new $20 Double Eagle coins after Roosevelt's order, but never put them into circulation.

"Coins are not money until it's monetized -- until the Treasury says they're money," Redden said. "They weren't legal to spend. It was simply a bright gold round disc. They were by order of the Treasury in 1937, melted down."

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But some coins escaped destruction: The Secret Service discovered years later that George McCann, the Mint's chief cashier, had stolen 10 of the coins.

In 1944, agents for Egypt's King Farouk -- an eccentric collector of stamps, aspirin bottles, old razor blades and coins -- applied for an export license for a 1933 Gold Double Eagle.

"It wasn't until a few weeks after that license was signed that suddenly everyone realized that an awful mistake had been made," Redden said. "This coin was illegal to own, and in fact clearly had been stolen from the U.S. Mint."

One by one, Treasury Department and other federal agents found nine of the coins, with a tenth discovered in King Farouk's collection. But the political climate stymied attempts to retrieve it.

"In 1944, we were in the middle of a world war, and Egypt stood at the crossroads in the middle of the Mediterranean," Redden said. "It was not, perhaps, precisely the right moment in diplomatic history to go and try to make a claim on a coin."

The coin detectives waited until 1952, when Farouk was overthrown -- and his famous collection put up for auction to get it back.

"The U.S. government recognized that the 1933 Double Eagle was in that collection, and they officially asked the Egyptian government to pull it from the sale and return it as stolen property of the United States," Redden said.

But like a coin in a magician's trick, the Double Eagle disappeared. Authorities lost track of the coin for more than 45 years -- until 1996, when a British coin dealer, Steven Fenton, brought it to the Waldorf Astoria Hotel in New York City to sell to an American collector.

Fenton got out of jail and went to court, and while he battled the U.S. government over ownership of the coin, the coin itself was stored in what authorities thought was a secure location: a vault at the World Trade Center.

But the coin was fated to survive yet again. Just weeks before the twin towers were destroyed on September 11, the case was settled out of court and the coin was moved to Fort Knox, Kentucky.

The 1933 Double Eagle has been under the watchful eye and heavy guard of the U.S. Mint Police ever since and will be until the coin is sold -- or rather, until the "disc" is sold: It won't technically be legal tender, and legal to own, until the Director of the U.S. Mint signs documents after the auction.

"The irony of ironies is, in order to make this coin totally legal and totally monetized, the buyer will have to give, in addition to millions of dollars it costs to buy it, $20 -- a $20 bill -- to go back to the Treasury," Redden said.

Under the settlement, Fenton and the U.S. government will split proceeds from Tuesday's auction. And what if there are any other purloined 1933 Double Eagles out there? The Mint says they may look like cold, hard cash, but they will be seized and melted down if discovered.